Brent crude rose as high as $126.41 per barrel—its highest level since March 2022—before settling down 3.4% at $114.01. U.S. West Texas Intermediate (WTI) also retreated from intraday highs, closing 1.7% lower at $105.07. Despite the pullback, both benchmarks remain on track for a fourth consecutive monthly gain.
The decline appeared technical rather than fundamentally driven, with analysts pointing to profit-taking, contract expiry dynamics, and large sell orders. Currency movements also contributed, as a sharp strengthening in the Japanese yen pressured the U.S. dollar and weighed on oil prices.
Underlying conditions remain tight. The ongoing conflict has effectively constrained flows through the Strait of Hormuz, a critical chokepoint that typically handles roughly 20% of global oil and LNG supply. Shipping activity remains severely reduced, with only a handful of vessels transiting daily compared to pre-war norms of over 120.
Market fundamentals continue to reflect significant disruption. Oil prices have nearly doubled since the conflict began in late February, underscoring the scale of supply losses and ongoing uncertainty around restoration timelines. Negotiations between the U.S. and Iran remain stalled, with key disagreements over nuclear policy, sanctions, and control of maritime routes.
Geopolitical risks remain elevated. The U.S. is reportedly considering additional military action, while Iran has warned of retaliatory strikes and reaffirmed its control over the strait. These dynamics continue to limit visibility on supply normalization.
While volatility is likely to persist, sustained constraints on Middle Eastern supply continue to underpin elevated price levels and reinforce broader inflation risks globally.